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LDHL (9/5/12)

Back in Late April I awarded a Douchie to the BH Team in part based on their pumping of a penny stock called LDHL (LD Holdings). I didn’t think much more about it until the other day when I was listening to Breitling. He did a video where he was doing a case study for his followers about stock picking. Guess which stock he chose for this “case study”? If you said LDHL you can probably see where this is going.

Also in the video Breitling told his listeners to buy 250 shares (11:45 in) and that he thinks it will go up to $9. I’m not a lawyer so I can’t say if he violated any statutes here, but I would certainly think he’s on shaky ground if he doesn’t have the necessary certification for giving investment advice.

I looked around for information on LD Holdings and discovered the following.

“Pump and dump” is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.

If you’ll click the link below you’ll see a chart for LDHL. Click on 6m to see the chart for the last six months and you’ll see that the stock took off in late April, about the time the BH Group started telling people about this great opportunity. Coincidence? Possibly. A couple of emails and conference calls later the stock went all the way up to $1 before plummeting back to the 20-30 cent range. The day Breitling did his video about LDHL it was selling at $.24. In less than a week it has spiked over 50% to close Wednesday at 38 cents. Was there any news or fundamental reason for the stock to spike like that? Enquiring minds want to know.